Life settlements, provide a sensible exit strategy for unwanted or under performing life insurance policies with an immediate cash settlement
Life settlement is when a policy owner sells the policy to a third party for more than the cash value offered by the life insurance company.
The purchaser becomes the new beneficiary of the policy on death or at maturation, and is responsible for all subsequent premium payments.
With life insurance there are two options, to either let the life insurance policy lapse or cash in the policy for its surrender value. Most insurance agents are aware of only these two options, and it's written in the general contract provision.
In this situation (life insurance settlements) a policy owners can access fair market value for their policies, rather than accepting the lower cash surrender value from the issuing life insurance company.
Life insurance settlements allow you to assign or sell your life insurance policy for an up-front, larger cash payment.
Life settlements are an option for high-net-worth policy owners age 60 or older, this concept has gained attention from high-profile policy holders in the States
Thursday, June 12, 2008
Life Insurance Settlements
Life Insurance Settlements is the sale, assignment, transfer of ownership of a life insurance policy to a third party
Life insurance settlements or viatical settlement is the sale of a life insurance policy by the policy owner before the policy matures.
When such a sale is conducted, the price will be less than the face amount of the policy but usually more than premiums paid or more than current cash surrender value. The sale creates immediate cash settlement.
Generally, viatical settlements involve insured individuals with a life expectancy of less than two years.
In United States, without state-subsidized health care and high health care costs, this is practical, because of the high health insurance premiums that severely sick people have to face. This industry grew in popularity in the States in the 80s
When you have a policy holder with terminal illness, or if you are caring for some love ones who is terminally ill. The thought of time and money (expensive health care and care giver's costs) will make you think of the life insurance policy, and what it's cash value will do. This will be a situation for life settlements.
Viatical settlement is similar to buying a bond with a negative coupon and an uncertain redemption date. The return depends on the seller's life expectancy and when he or she dies.
Life insurance settlements, which are similar settlements but involve insureds with longer life expectancies (two to fifteen years).
Life insurance settlements or viatical settlement is the sale of a life insurance policy by the policy owner before the policy matures.
When such a sale is conducted, the price will be less than the face amount of the policy but usually more than premiums paid or more than current cash surrender value. The sale creates immediate cash settlement.
Generally, viatical settlements involve insured individuals with a life expectancy of less than two years.
In United States, without state-subsidized health care and high health care costs, this is practical, because of the high health insurance premiums that severely sick people have to face. This industry grew in popularity in the States in the 80s
When you have a policy holder with terminal illness, or if you are caring for some love ones who is terminally ill. The thought of time and money (expensive health care and care giver's costs) will make you think of the life insurance policy, and what it's cash value will do. This will be a situation for life settlements.
Viatical settlement is similar to buying a bond with a negative coupon and an uncertain redemption date. The return depends on the seller's life expectancy and when he or she dies.
Life insurance settlements, which are similar settlements but involve insureds with longer life expectancies (two to fifteen years).
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